Monday, May 26, 2008

MM Lee : Subsidies will not solve Singapore's problems!

"Yeah but what about removing the excessive fees, taxes, monopoly profits that resulted in our govt accumulating one of the biggest reserves per capita in the world" - Lucky Tan
Subsidy is bad, welfare is worse. If that is so, doing the reverse has to be good - squeezing the citizens for more, huge surpluses etc. The govt of Singapore has done alot of good in recent years. It is easy to argue that subsidies are bad - they result in misallocation of resources, a crutch mentality and very often they allocate govt funds to those who don't need. Subsidies are bad...bad...bad.....lets see.
For some reason, I have to bring people to the A&E more often than I want neighbors, family members ...I did it 5 times this year! Many years ago, there was this problem of people going to the A&E when they didn't really need to - one reason was the lack of 24 hour clinics so people with slight fever, coughs and cold problems turn up at the A&E. The problem was you can't turn people away when they go there. To solve this, the fees at the A&E were raised so that it would be a pinch to go there unless you really needed to. So it has been increased from a subsidised rate to $70. $70 is higher than what you would pay if you were to go to a "for profit" private clinic. In order to have an effect, it was raise so that the middleclass would feel the pinch. But what happened to the lower middle and poor people - they actually avoid going to the A&E even when they need to. For them a $30 fee would be sufficient deterent but $70 deters them from seeking treatment even when they need to. When subsidies are not given to people who need it, they do suffer.
Subsidies are still bad...bad..if your electricity bill is subsidized, you will not think twice leaving your air-con on all night, you might not be so conscious to buy the "inverter" type air-cons that uses less energy. One colleague actually think of saving power more proactively when a rude awaking electricity bill of $420 hit him last month. So no subsidy is good. Lets do away with subsidy. Lets do the reverse, let Singapore Power make money. So while the poor families are squeezed to saving those precious watts by diming their homes or living in darkness - Singapore Power ends up with a pile of several billions in profits. So we are told that subsidies result in misallocation so they are removed, and GLCs are allowed to make monopoly profits. So where does Singapore Power put its billions - not back in the pockets of the poor folks they have squeezed but buying assets in Australia. So how does that benefit Singaporeans? Isn't there misallocation when billions are made in providing services to Singaporeans are used to invest overseas? Subsidies are bad but at least it goes back to the citizens. Sure the rich don't need it but they also pay more in taxes, the poor need and get it. What about identifying the poor and then giving them a lower utilities rate relative to their income rather than the price of oil? Even some of the most capitalistic societies do that.
One cannot discuss subsidy without talking about the "market subsidy" given out by the HDB. You know if subsidies are so bad, why not do away with them for housing. They are there for the simple reason that is the same in every land scarce country/city, if there is no subsidy, you will find many people homeless. Reluctant as they are, the PAP govt is compelled to give this "market subsidy". While Singapore's HDB flats are the most expensive public housing in the world more expensive than private property in many countries, they are priced to prevent homelessness. Unless every Singaporean can afford a private condo, HDB has to keep building these "subsidised" flat. So subsidies are not so bad?...They are bad but necessary? The HDB system is really fine tuned for the poor especially the poorest people. They can't afford to buy flats so they have to rent. HDB checks their income level, as their income rises, HDB increases the rent and reduces the subsidy to absorb the increase in their income.
"Is anyone complaining about the subsidised service Singaporeans contribute when they serve their NS? Subsidies are okay if the govt is the one receiving it..." - Lucky Tan
I guess that MM Lee is right as usual. Giving subsidies will not solve Singapore's problems. But what are Singapore's problems? If you read his speech carefully, the main problem in Singapore is to keep society competitive and grow year after year. The answer to our problems is for ordinary Singaporeans to keep working harder and longer. That has always been the answer - working harder and longer.
MM Lee says giving subsidies will not solve Singapore's problems
By S Ramesh, Channel NewsAsia Posted: 25 May 2008 2021 hrs

Minister Mentor Lee Kuan Yew

MM Lee says giving subsidies will not solve Singapore's problems

SINGAPORE: Singapore's problems cannot be solved by giving subsidies, but by having a dynamic economy, said Minister Mentor Lee Kuan Yew.

Speaking at the Tanjong Pagar Day celebrations at the Queenstown Stadium on Sunday, Mr Lee drew lessons for Singapore from how countries in the region are tackling their problems.

The world has moved into years of high prices for food and oil, said Mr Lee. But Singapore does not have agriculture, so people have to earn enough money by working hard and smart to pay market prices for food.

He made it clear that Singapore cannot go the way of welfare systems in Europe, which have lowered incentives to strive and excel.

The minister mentor said: "I read many letters in the press urging subsidies for all manner of things – seat belts for school buses, food for the poor, medical fees and so on. Singapore must remain a competitive society to generate growth year after year.

"The government must ensure that everyone has the highest paid job he is qualified to do. If his salary is below the minimum for a decent life, the government will top up with Workfare. When everybody knows the cost of what he consumes or uses, he will spend his money more to his benefit."

Mr Lee noted that countries in the region have taken different approaches to worldwide problems.

In Indonesia, there are riots over an anticipated lowering of oil subsidies, while in Malaysia, the newly elected government has not reduced the oil subsidy so as not to upset the electorate.

In handling natural disasters, Myanmar's military leaders had refused foreign aid for weeks after Cyclone Nargis left millions homeless. But the reaction was different in quake-hit China.

Mr Lee said: "Premier Wen Jiabao immediately flew to the quake areas. 120,000 troops were sent by air. The people were united and rallied to help victims by donations, and many went to Sichuan to do relief work.

"The Confucian habits of communitarian solidarity and mutual help have again surfaced, although Communist ideology marginalised Confucian values for 40 years."

The minister mentor added that Singapore does not have earthquakes, tsunamis or typhoons because of the country's favourable geographical location.

His call to Singaporeans is to be grateful that the nation has long-term stability, continuing high-value investments and good growth. Mr Lee said he is confident that in five years, Singapore will be a more lively and beautiful city.

Mr Lee, who cut short his speech because of a sore throat, said he needed to save his voice for a court case involving Dr Chee Soon Juan on Monday.

"I've got to save part of my voice to let him cross-examine me. Of course, in the course of the cross-examination, I have a few things to say," he said.

The High Court has set aside three days for the hearing on damages claimed by Prime Minister Lee Hsien Loong and the minister mentor against the Singapore Democratic Party and its leaders.

- CNA/so


Anonymous said...

"....However, he is not in favour of subsidising transport 'because then you will have UNNECESSARY TRAVEL...In this way, we impose on every individual the RESPONSIBILTY for his life.' "


Anonymous said...

"His call to Singaporeans is to be grateful" Grateful to who and what... Grateful to them that they always want us to eat shit and they pay themselves millions.

Anonymous said...

So, now that the oracle has spoken about the evils of subsidies, does it mean no more top-ups to cope with cost of living but more increases to make Singaporeans work harder and longer. I wouldn't bet on salaries getting higher to cope with the increases, not when we have so many foreign workers competing on lower and lower wages.

Greg said...

Great post. has great tips and guides on improving your brain power. You can give your brain power a boost just by follwing the tips that has got to offer.

Anonymous said...

Since the old bastard is so against 'subsidies' and 'welfare', he should WALK THE TALK and do away with shelling out little dangling carrots such as "NSS" and other 'growth dividends'.

Coincidentally they come only once every 5 years, always just before every election!

Don't want to give any form of social safety net, why not do away completely with giving out ANY money at all, remove the 2.5% return on CPF accounts too!

The ministry of truth said...

What about the PAP subsidies to themselves to compensate their "sacrifice" of giving up an illustrious career in the private sector.... More and more Singapore is becoming like George Orwell's animal farm:

Squealer: "Comrades!" he cried. "You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organization of this farm depend on us. Day and night we are watching over your welfare. It is for your sake that we drink that milk and eat those apples."

Leave if you can... rumour has it one of LKY's son's wants to leave but daddy wont let him...

Anonymous said...

I love the PAP govt. While oil prices rises, it only means more tax revenue from the oil price increase. And more tax can only mean more bonus for our ministers.

Bravo Bravo.

Capt_Canuck said...

I totally agree with MM Lee's thinking. I mean, if you give subsidies you take away the fear of starving to death or not having enough money for the little things like shelter, food or medical care. Subsidies would take away those little incentives and without those incentives Singaporeans would turn into lazy greedy selfish slobs sucking the money out of the gov't and leaving nothing for the politicians to suck out of the gov't

Anonymous said...

Cannot subsidise Singaporeans but perfecly ok to give MNCs tax holidays and make locals bear the tax burden. Did you know that expats who work for such MNCs can even claim for their kids school fees, bus transport and uniforms? Why? Answer: cos the companies don't have to pay tax and can afford to be generous. Even those not on tax holiday can reimburse their employees these expenses and claim them as deductible business expenses so they pay less corporate tax.

Onlooker said...

The most subsidize idiots are those so call elitist(meritocrats).
Why use a scholarship when the million dollar father can fully afford the Fees and even worse those scholar??? become Quitter and stay in their host countries.
Basically this is reverse Robin Hood.
Rob from the the poor give to the ultra rich and powerful.
By the way white unicorns usually have SAF office r position.
Hopefully the end is near.

Anonymous said...

Cannot keep on subsidizing? Then better wake up, MM. What's causing the clamour for more govt help? The MM does not know or does not care to know and just want to say no.

The distance between him and his govt policies and their effect on the ground is too great for him to understand the situation.

See that's why politicians in true democracies need checks and balances to keep them on their toes on how their policies are impacting society.

PAP top leadership believes it does not need that because it is superhuman.

But never mind, the queue for govt handouts is growing and will continue to grow.

You don't like it, MM? You got no choice. You are the govt. No matter what a scrooge and heartless regime PAP is, I am sure you are also too thin-skinned to withstand the world pointing to more and more poor people in the streets.

So no matter what, PAP must continue to help the needy.

You created the problem through you FT policy, through your rocketing public housing prices, your false healthcare subsidy because it is actually a subsidy for the private hospitals you actually own, through rewarding your ministers, top bureaucrats and top executives in your countless GLCs with such ridiculous pay...

You don't believe your policies are the causes of the clamour for subsidies, MM? You still enjoy putting the blame on the people for their lack of entrepreneurship, lack of skills, laziness, whatever?

Tis called govt by ego and senility.

Anonymous said...

We the citizens need lifts on every floor in a highrise building. The government wants these to be implemented as they realise these are needed by the citizens. Even for the HDB window hinges the citizens has to bear the cost of replacement. However, it appears that there was a lack of foresight on their part in not having them in the first place. Now the burden is on the citizens to pay for their mistakes. Similarly they encourage the slogan "two is enough, one better" and they did a U-Turn on the one child policy. The public were the ones who were affected for now there is -zero growth population.

If one were to think deeply, all Singaporeans had to sacrifice for Singapore. Apart from NS, what about the loss of use of most of the land fronting the sea? We have Changi Airport, PSA, Marine Parade, Pulau Ubin and etc. Are these not sacrifices Singaporeans made so that the nation benefit? Then further on, PSA and Changi amongst many other government-linked organisations are making millions, if not billions, annually to fill the coffers of the government and Temasek. Why are the government so kiam to give some back to the people?

Why do we need to create great wealth for the nation, be a wealthy country, but the people are suffering and yet have to work beyond retirement age to survive? Are we not making enough sacrfices? For whom does the bell tolled?

Anonymous said...

Yes, Singaporeans should exercise more responsibiity for themselves ... refuse to docilely accept the flawed arguments offered! By treating us as idiots unable to decipher badly-packaged explanations shoved at us blatantly, are the leaders merely proving that they are (idiots) leading 'idiots'? Wage increases are not alright for ordinary s'poreans to maintain competitiveness, but perfectly fine for ministers and govt topdogs? Don't topdogs have to remain competitive? More subsidies for s'poreans won't do, but millions more for ministers won't hurt? Just 1 month of a minister's salary is sufficient to pay the household expenses of at least 100 low-income families! Think about it!! A terrorist's escape is solely the fault of lower-level workers? In first world countries such as the U.K & Japan, this would have required the resignation of the minister! A govt quick to claim credit but slow to help or demonstrate honour in leadership during critical times will be remembered ... sorely. Fellow citizens, mark this out!

Anonymous said...

Bottomline is we have only 2 paths to take (since demonstration, even peaceful ones, are against the law due to the supreme foresight of PAP)

1) Vote against PAP

2) Migrate

Seriously, what else can we Singaporeans do to protect ourselves and our families?

Anonymous said... subsidies eh?

tell that to the foreign banks thats been working out of singapore..they get subsidies, in this case tax breaks, for running their operations here.

So, govts like US, China, Indonesia and Malaysia - who, for example, subsidises their domestic oil prices to keep prices down, are all wrong?? they're doing their citizens a disservice??

subsidies are not permanent right? you help out when you can, and if the situation improves, you can pull them out.

sigh... we're being talked to like we're children.

mint said...

Only a mediocre mind will think that subsidies are good. If you are a genius and have a great mind like MM lee and his people, you'll understand why subsidies will not work. Not only that, additional hikes like the coming ERP hikes this july(which obviously hasn't solved the traffic congestion here but which the ingenious party is convinced will work utlimately)on top of the no-no to subsidies is the ultimate solution to spore problems. I think this is how u'll see their point: As the chinese saying goes "Good medicine tastes bad", our govt is trying their best to teach us the virtue of working hard and be self-reliant rather than a weakling who only knows how to rely on our clever govt. Utlimately, you'll emerge from this hardship as a stronger being who's able to withstand all the hard shit they create in your life. See that??? But too bad i have to confess that i'm just a mortal with limitations. I put in my own efforts and i don't expect the govt to do everything for me. But as a singapore citizen, i would want my govt to help me and the rest alike. "Ask not what the country can do for you but what you can do for the country" What has the country done for us? - HIKING PRICES. What have we done? - Working as hard as possible to sustain the economy and ministers' pay rise.

Anonymous said...

this is a 25 yrs old mechanic and no matter how hard i try i always find the problem unsolvable because of the ever changing goverment policies. i have a 6mth old baby girl and a wife to feed with no house as it is way beyond my means for a resale flat while built to order flats takes 3 yrs to finish(not that i havent applied)... currently living with my mum in a one room rental house from hdb at 350 per month and it is on a two year renewal contract which i just renewed and hdb increased it by another 100 which was 250 before... this is so frustating,sometimes i wonder why do i get married or even bother to listen to the government and had a baby...should have just aborted it when i had the chance...lets all just work harder and longer for the republic of singapore without families as it burdens us..may you grow old without any children and lets see whether friends and neighbours could replace that....

Web Design Company said...

Nice information, many thanks to the author. It is incomprehensible to me now, but in general, the usefulness and significance is overwhelming. Thanks again and good luck! Web Design Company

diseƱo web valencia said...

It cannot have effect in actual fact, that is what I think.

Super Bowl Commercials 2012 said...

Such a wonderful post. Thanks for the share. It was very interesting and informative.
Bot and me| Images|

rocky case said...

Stephen Stapinski

Really your blog is very interesting.... it contains great and unique information. I enjoyed to visiting your blog. It's just amazing.... Thanks very much for the share.